Practice Profitability One System At a Time

Marc Silber sees it all the time. The typical scenario includes a doctor who doesn't believe he is a very good leader. The practice is producing about $40,000 per month and struggling to achieve that. The doctor is the CEO, the VP of Production, and the Office Manager all rolled into one superhuman who is stressed to the max. There is no accountability among the staff. Job descriptions are non-existent. And business systems are as reliable as rain in Death Valley.

Mr. Silber runs Pacific Management of San Jose, CA, a consulting practice that works with dentists to establish business systems and training programs designed to maximize profitability and build an effective team environment. "The concept of 'team' is not just a cliché. It is true that the best run and most profitable practices really do work as a team. Conversely, the poorly run practices are those where you just have a bunch of individuals who are not coordinated."

Leadership of the team sets the standard for the group as a whole, and Mr. Silber acknowledges that many dentists struggle with their role as leader. He says that frequently dentists rate themselves poorly as leaders. "I ask them 'Where are you giving yourself low marks?' And generally they will say things like, 'I'm too soft. I don't give clear directions. I don't follow-up. I don't delegate.' Leadership issues are the first area to look at. If you take two practices in which both doctors have excellent clinical skills the difference between the two practices will be in the executive's skills. Most dentists get more training to operate a car than they get to operate a practice." Consequently, dentists often must learn leadership skills on the fly. The result typically manifests itself in business systems that are either non-existent or inefficient and breakdowns in staff accountability and effectiveness.

Managing by statistics

Mr. Silber concedes that many dentists would prefer to be doing dentistry than managing a staff. Moreover, most doctors would gladly spend continuing education hours improving their clinical rather than managerial skills. "Dentists didn't go to dental school looking forward to those challenges with the staff, such as when someone quits suddenly, or the computers die, or trying to get more patients. Nobody goes into practice for those reasons. They are interested in working with patients and the challenges associated with that. But what's interesting is that by putting a good management system into place, dentists actually have more time to do the dentistry they want to do." Dentists need management skills that are as precise as their clinical skills emphasizes Mr. Silber.

He advocates managing by statistics. A method he says enables the owner to measure the effectiveness of each individual staff member.

"The point of managing by statistics isn't to get overly involved in numbers and forget about the human side of things. But there are some key elements used in sports that apply very well to business and one of those is statistics. We know the stats of every player on a team and the stats of the team as a whole. Therefore, we can judge how effective they are. If you apply that concept to the practice, it's going to allow the work environment to become much more enjoyable to both the owner and the staff." This approach builds accountability among the employees who, with the doctor, establish goals for their areas and are responsible for reporting on their specific systems regularly during weekly staff meetings.

Money hemorrhage

Like most practice management consultants, Mr. Silber strongly advocates the importance of job descriptions and standard office policies. He emphasizes that for dental offices to achieve the kind of profitability they are capable of they must adopt a few basic concepts including staff training, staff accountability, system implementation, and follow-up to ensure that established systems continue to function effectively. That being said, even in offices where systems appear to be functioning well, a breakdown in treatment acceptance can produce the "biggest money hemorrhage" for practices. "Most practices are losing a huge amount of income because they don't have a smooth system in place to help the patient overcome the barriers to accept treatment. There is no faster way to improve collections, production, and the bottom-line than improving treatment acceptance."

Mr. Silber urges doctors to present treatment plans to patients as if the person were a member of the doctor's family and there were no costs involved. "The doctor is looking at it from a clinical standpoint. This is the treatment plan I honestly feel this patient needs. The doctor has to be able to communicate to the patient clearly and in lay terms what this plan consists of. Many doctors talk way over the patient's head. They also will talk patients into a treatment plan and then right out of it. The patient nods their head indicating they want to do it. Then the doctor says 'But on the other hand we could…' and talks the patient right out of it."

Half of the equation, says Mr. Silber, is presenting the best plan for the patient. The other half is providing the patient with methods to accept treatment. A key component is using a treatment coordinator. "Whether we like it or not, there is a consumer decision going on here. If you are presenting a $5,000 treatment plan, you send the patient to the front desk. The phone is ringing. There are five people sitting right there in the waiting area. The patient is going to feel extremely uncomfortable talking about a $5,000 decision in front of all of that. This is where many practices lose income. That is not the way to treat someone who is considering investing that kind of money."

A treatment coordinator ensures that scenario doesn't take place. Their job is to speak to the patient in private to help them overcome the barriers that may interfere with the patient's willingness to proceed with treatment. The treatment coordinator also is able to discuss the treatment plan from a financial standpoint including the available payment options. It is with the treatment coordinator that the patient can voice their concerns and overcome their fears, notes Mr. Silber. "Patients are not comfortable talking to the doctor about these things, but they will discuss them with a treatment coordinator."

A successful treatment coordinator, notes Mr. Silber, receives necessary training to prepare them for this pivotal role. "The treatment coordinator can understand and address the concerns the patient has. If it's a clinical concern, they know when to bring the doctor back in for further explanation. If it's a purely financial concern they work with the patient." Ideally, the practice has several external financial institutions it works with to help patients finance treatment.

Beyond the practical financial elements, doctors also need to consider the emotional element of treatment acceptance. Chief among them is involvement of all the decision-makers. "We know that whenever someone is asked to make a major financial decision - buying a house or car - all the decision makers in the family have to be involved. That is often forgotten when it comes to treatment plans. So here's the wife who has been presented a large treatment plan. And she says she needs to talk to her husband. The wife then tries to explain the treatment to her husband. He says, 'Honey you don't need veneers. Your teeth are fine.' She agrees with him and that's it."

Mr. Silber finds that if all the decision makers are involved, they understand and appreciate the need for the treatment as well as the potential benefit to the patient.

In looking at practice profitability, Mr. Silber urges doctors to put themselves through the paces. "All you have to do is put yourself in your patients' shoes. If you went through the very same procedures in your own practice that you ask your patients to walk through would you accept treatment or would you walk out?"